TSO3 received US$7.5 million (CAD$10.4 million) and performance minimums from Getinge Infection Control AB, a global leader in infection control solutions, in exchange for exclusive global distributor rights to TSO3's FDA-cleared, STERIZONE® VP4 Sterilizer.

Revenue was $1.6 million for the year 2015 and $0.2 million for the fourth quarter of 2015. On December 21, 2015, TSO3 announced that it had received purchase orders from Getinge for the full amount of its minimum purchase commitment for 2016, and all related shipments are scheduled for delivery in 2016. Consequently, in the first two months of 2016, the Company shipped product and recorded revenues in excess of all revenues recorded in all of 2015.

Cash, cash equivalents and short-term investments totaled $20.9 million at December 31, 2015. TSO3 had $32.8 million in cash, cash equivalents and short term investments and no debt as of February 5, 2016. This amount is inclusive of $13.5 million in warrant proceeds received in 2016.

83.3 million shares outstanding as of December 31, 2015, which increased in the first quarter of 2016 as a result of warrant exercises. As of March 22, 2016, TSO3 had 91.0 million shares outstanding and no outstanding warrants.

The Company's net loss was $8.1 million, or $0.10/share for the year of 2015 and $2.9 million, or $0.03/share, for the fourth quarter of 2015. The Company generated $3.9 million in cash from operations during 2015 and $8.9 million in the fourth quarter of 2016. Excluding the December 2015 Getinge receipt, the Company consumed cash from operations of $6.5 million for 2015 and $1.5 million for the fourth quarter of 2015.

Fourth Quarter 2015 Operational Highlights

Received clearance from Health Canada to sell STERIZONE® VP4 Sterilizer with extended claims including claims for colonoscopes and duodenoscopes, in Canada.

Filed extended U.S. claims for STERIZONE® VP4 Sterilizer to include the sterilization of up to eight channels in a single endoscopic device of up to 3.5 meters in length — marking an industry first.

Accelerated expansion of manufacturing and assembly workforce for the STERIZONE® VP4 Sterilizer to meet demand.

Appointed Glen Kayll as CFO, who brings more than 20 years of senior management experience, including as CFO and head of operations for Canadian and U.S. listed companies.

Appointed Steve West as director, adding to the board more than 30 years of public company experience in health and life sciences, nuclear industry, specialty chemicals and venture capital.

Management Commentary

"During the fourth quarter, we achieved several major milestones with our STERIZONE® VP4 Sterilizer, including the exclusive global distribution agreement with Getinge, clearance of extended claims relating to colonoscopes, duodenoscopes and other flexible endoscopes by Health Canada, and, as an industry-first, the filing for extended U.S. claims to include the terminal sterilization of up to eight channels in a single device," said TSO3 president and CEO, R.M. (Ric) Rumble.

"Soon after we signed the exclusive Agreement with Getinge, they submitted a purchase order for the full amount of their minimum purchase commitment for 2016. It is rewarding to see their commitment and the demand they anticipate from their customers. This action is also in line with their message to Getinge shareholders that their entrance into the low-temperature sterilization market represents great potential for accelerated business growth."

"Production toward fulfilment of this order began immediately, with the first shipments rolling out in January. Through the first two months of 2016, we have recorded revenues in excess of all revenues recorded in all of 2015 and with manufacturing improvements made year to date, the Company believes it is in a position to assemble and deliver in excess of 100 sterilizers."

"To ensure an orderly ramp-up in production, we recently appointed Harold R. Tessman to the new position of COO. As a proven operational leader for fast-growing international organizations, Harold will focus on strengthening our manufacturing and quality control systems at our U.S. and Canadian facilities, including expanding our manufacturing workforce."

"Before the end of the year, we expect to receive regulatory clearance for instruments that were previously only subject to high-level disinfection processes. These extended claims would further differentiate our technology, and moreover give healthcare providers a new tool to break the cycle of instrument-associated infection transmission. The feedback received from U.S. regulators is typical and consistent with the seriousness of elevating the standard of reprocessing for these extremely challenging medical devices. The minimal testing is planned or already underway, and we have requested meetings with the agency to discuss the work."

"Meanwhile, we will be working to ensure that our channel partner meets or exceeds their contractual performance objectives. This means strengthening our supply chain process to deliver quality product at increasing volumes, as well supporting the Getinge sales team in the commercial rollout of the STERIZONE® VP4 Sterilizer." concluded Rumble.

Additional Fourth Quarter and Full Year 2015 Financial Information

In the fourth quarter of 2015, sales were CAD$0.2 million as compared to CAD$0.1 million in the same year-ago quarter. For the full year, sales were CAD$1.6 million versus CAD$0.4 million in 2014. The increase in both periods was due to sales related to the company's new STERIZONE® VP4 Sterilizer.

Supply chain expenses totaled CAD$2.1 million in 2015, as compared to CAD$1.1 million in 2014. The increase is primiarly due to increased operation costs in 2015 to support STERIZONE® VP4 Sterilizer shipments.

Marketing, sales and service expenses totaled CAD$0.9 million in 2015, as compared to CAD$0.3 million in 2014. The increase was due to increased marketing-related activities (including trade shows and professional association meetings), customer-related travel expenses, and salaries and commissions related to the expansion of sales in the U.S.

Research and development expenses were CAD$2.8 million in 2015, as compared to CAD$2.3 million in 2014. The increase refects the recognition of R&D tax credits in 2014. In 2015, TSO3 concentrated its effort on its new STERIZONE® VP4 Sterilizer, while at the beginning of 2014 the company recorded R&D tax credits following amended reports for years 2011 and 2012.

Before accounting for the tax credits, R&D expenses were CAD$3.0 million in 2015, as compared to CAD$2.9 million in 2014. The company incurred similar salary, test and consulting expenses in association with FDA clearance and product development activities in both years.

Administrative expenses totaled CAD$4.2 million in 2015, as compared to CAD$2.7 million in 2014. The increase is primiarly due to increased investors relations activities, professionnal fees related to the incorporation of the subsidiary TSO3 Corporation and the Getinge agreement, and salary expenses including a severance amount of $0.4 million.

Net loss was CAD$2.9 million or $(0.03) per basic and diluted share in the fourth quarter of 2015, as compared to net loss of CAD$1.6 million or $(0.02) per basic and diluted share in the same year-ago period. For the full year, net loss was CAD$8.1 million or $(0.10) per basic and diluted share, as compared to net loss of CAD$5.9 million in 2014.

Cash, cash equivalents and short-term investments totaled $20.9 million at December 31, 2015, as compared to CAD$6.0 million at December 31, 2014. As of February 5, 2016, TSO3 had CAD$32.8 million in cash, cash equivalents and short term investments and no debt. This amount is inclusive of the US$7.5 million received form Getinge in November 2015, as well as CAD$13.5 million in warrant proceeds received in 2016.

Analysts and institutional investors are invited to participate on the call. Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.

The STERIZONE® VP4 Sterilizer developed by TSO3 is a dual sterilant, low temperature sterilization system that utilizes vaporized hydrogen peroxide (H2O2) and ozone. Its single cycle can sterilize a large number and wide range of compatible devices, thereby allowing for a cost effective and error-free sterilization process. TSO3'sunique Dynamic Sterilant Delivery SystemTM automatically adjusts the quantity of injected sterilant based on the load composition, weight and temperature. With its large 75 lb load capacity and a short cycle time, the STERIZONE® VP4 Sterilizer can enhance throughput and lower sterilization cost. The STERIZONE® VP4 Sterilizer was cleared for commercialization in the United States in December 2014.

Founded in 1998, TSO3's activities encompass the sale, production, maintenance, research, development and licensing of sterilization processes, related consumable supplies and accessories for heat-sensitive medical devices. The Company designs products for sterile processing areas in the hospital environment that offer an advantageous replacement solution to other low temperature sterilization processes currently used in hospitals. It also offers services related to the maintenance of sterilization equipment and compatibility testing of medical devices with such processes.

The statements in this release and oral statements made by representatives of TSO3 relating to matters that are not historical facts (including, without limitation, those regarding the timing or outcome of TSO3's sales, business or operations) are forward-looking statements that involve certain risks, uncertainties and hypotheses, including, but not limited to, general business and economic conditions, the condition of the financial markets, the ability of TSO3 to obtain financing on favourable terms and other risks and uncertainties.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful.

The TSX has neither approved nor disapproved the information contained herein and accepts no responsibility for it.